AT&T Seeks To Cut Costs With Accenture 'Co-Sourcing' Deal

Within five years, AT&T plans to cut its spending on residential long-distance sales and customer service in half, thanks to a $2.6 billion "co-sourcing" deal with Accenture, the company said Monday.

Under the five-year deal, AT&T will supply most of the employees involved in the effort, and Accenture will revamp AT&T's sales and customer-service operations by putting in new computer systems and software and implementing new training and performance-management techniques, according to the companies.

AT&T decided to co-source the sales and customer-service operations for its consumer long-distance operation to Accenture to reduce costs in the face of declining revenue, says Howard McNally, a senior VP at AT&T's consumer long-distance unit. The unit's revenue has been falling year after year due to steady erosion of its customer base by competitors and the downward pressure on long-distance rates. At the same time that it tries to cut costs at the unit, AT&T hopes to increase the quality of the customer service it provides by making the operations more efficient, McNally says.

Specific improvements planned for the unit include the activation of customer self-service capabilities via the Internet and interactive voice-response systems and the implementation of a CRM system to better-track and understand customers and anticipate their needs. Improvements also will involve training customer-service representatives using new, Web-based training and simulation tools, according to executives at AT&T and Accenture.

With customers expecting higher levels of customer service, "This move will help AT&T maintain a competitive advantage," says Jeff Kagan, an independent telecom industry analyst. As other long-distance companies follow AT&T's lead, Kagan says, "we'll be seeing a renewed focus on the customer among all the competitors."